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How the FIA plans to avoid Red Bull cost cap saga

FIA Single-Seater Financial Regulations Director, Federico Lodi, explains how the process has improved for 2023.

Start Hungary 2023
To news overview © Red Bull Content Pool

The FIA has provided an update on how they plan to provide a "quick outcome" to the Formula 1 cost cap auditing for the 2022 season.

Last year, three teams fell foul of the regulations: Red Bull, Williams and Aston Martin. The latter two teams committed procedural breaches relating to paperwork and submissions, which resulted in them being handed fines by the governing body.

Red Bull was subsequently hit with the biggest penalty for their $1.8 million overspend in 2021, which led to a $7 million fine and a 10% reduction of their aerodynamic testing on top of their ATR allowance for 2023.

But Mercedes Team Principal Toto Wolff called for the process to be sped up, to avoid it being dragged on into another season.

Desire for quick outcome

The teams provided an 'interim' submission for the 2022 season in June last year, with the full submission being made on 31st March 2023.

To improve the process for the teams, the FIA has made significant changes over the last few months. FIA Single-Seater Financial Regulations Director, Federico Lodi, explains: "It’s clear that there is an interest from the stakeholders to have a quick outcome.

"We have strengthened the department, and now we have 10 full-time employees working on Formula 1 financial regulation. This is a significant increase over last year, when it was just four."

Lodi points out that that it can be difficult to apply a "rigid timeline" owing to the fact that teams now submit documents that are between 150-200 pages long.

"There are many variables that need to be taken into account. First, there are the findings themselves – what we identify and what we need to dig into further," said Lodi.

"On top of that, we also have to take into account the fact that we do the review with the support of the team, and obviously, the finance department of the team is also busy with running its business; they may also have a reporting commitment to their shareholders for example.

"So, while we need to work as quickly as possible, for us the most important thing is not to undermine the robustness of the process."

FIA has 'clear target in mind' for future

Lodi explains that as the years go on, teams will become more aware of how to streamline the process internally within their respective companies.

"The more everyone becomes accustomed to the regulation, the more you become accustomed to the process, the more we are structured, and clearly the time will be reduced," said Lodi.

"We have to be realistic, because I don’t think that it will be feasible to finalise the review after one month or 45 days. It also depends on the findings, because if you need to open a formal investigation, it takes time.

"There are lawyers involved, advisory boards, so the process is a long one. But we have a clear target in mind to do it quicker."

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